NZD/USD Price Analysis: Bulls target 0.7100 amid falling wedge breakout, NZ jobs blowout
- NZD/USD yields a big technical breakout on the daily chart.
- NZD bulls gear up for a test of 0.7100 as 50-DMA resistance caves in.
- New Zealand’s jobless rate drops sharply to 4% in Q2, seals an RBNZ rate hike this year.
NZD/USD is flirting with monthly tops near 0.7067, rallying hard on stronger-than-expected New Zealand’s employment data for the second quarter.
The jobless rate in the South Pacific Island nation dropped sharply to 4% in Q2 vs. 4.5% expected, confirming an RBNZ rate hike later this year.
Further, an improvement in the risk sentiment also lends support to the kiwi bulls, as all eyes now turn towards the US ADP and ISM Services PMI report for fresh trading incentives.
Looking at the daily technical graph for the kiwi, the price confirmed a falling wedge breakout on closing Tuesday above 0.7014, with the jobs blowout offering extra zest to the NZD bulls, as they storm through the bearish 50-Daily Moving Average (DMA) at 0.7054.
The 14-day Relative Strength Index (RSI) is pointing higher above the midline, suggesting that there is more room for the upside.
Therefore, the buyers target the confluence of the 100 and 200-DMAs at 0.7100.
The upside breakout has defied a warning of a bear cross, as 100-DMA cut through the 200-DMA from above a day before.
NZD/USD daily chart
Alternatively, if the bulls fail to find acceptance above 50-DMA, then a retracement towards the wedge resistance now support, now at 0.7010, cannot be ruled out.
The next relevant downside target for kiwi sellers is seen at the horizontal 21-DMA at 0.6981.
NZD/USD additional levels to watch